Construction Law Blog
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When issuing citations under the Washington Industrial Safety and Health Act of 1973 (“WISHA”), the Department of Labor and Industries (“L&I”) commonly classifies violations as either “general” or “serious.” The level of severity has an effect on the civil penalty – for example, the civil penalty of “serious” violation can reach $7,000 per violation – as well as the contractor’s safety record. Contractors with poor safety records may pay more for insurance and have a more difficult time procuring work.
The Washington Industrial Safety and Health Act of 1973 (“WISHA”) is a statute that empowered the Department of Labor and Industries (“L&I”) to create and enforce safety and health regulations for nearly all employers and employees in the state. WISHA was the first fully-operational state safety and health program approved by the federal government. Under WISHA, L&I may conduct investigations into employers that it believes to be in violation of a safety of health statute or regulation, and issue a citation. These citations are posted at or near the place of violation, and also are posted online as a matter of public record.
In Washington, general contractors are primarily responsible for compliance with the Washington Industrial Safety and Health Act of 1973 ("WISHA"), even when it comes to the conduct of their subcontractors. If a subcontractor commits a violation, the Washington Department of Labor and Industries ("L&I") may still issue a general contractor a citation. The Board of Industrial Insurance Appeals - the quasi-judicial administrative body charged with reviewing L&I citations - has found a limited exception to a general contractor's "primary responsibility," but only if the general contractor has a safety program that is effective in practice and the violation was the result of unpreventable misconduct.
President Obama, on Thursday, July 31, 2014, signed an Executive Order that requires contractors bidding on federal government work to disclose labor law violations and gives screening assistance to federal agencies awarding contracts. Termed the “Fair Pay and Safe Work Places Executive Order” will apply to companies pursuing federal contracts worth more than $500,000 and becomes effective in 2016. Government statistics indicate this executive order will affect roughly 24,000 businesses that employ 28 million workers on federal contracts. According to a White House fact sheet: “The Executive Order will ensure that the worst actors, who repeatedly violate the rights of their workers and put them in danger don’t get contracts and thus, can’t delay important projects and waste taxpayer money.”
Householder Exemption Does Not Excuse Subcontractor Performing Unlicensed Electrical Work on a Residential Project Owned by General Contractor
On April 28, 2014, Division I of the Washington Court of Appeals held that the householder exception of RCW 19.28.261(6) does not permit a subcontractor to perform unlicensed electrical work on a residential project owned by a general contractor.
Many contractors now carry professional liability insurance in addition to their commercial general liability insurance because of the prevalence of alternative procurement delivery methods, such as general contractor/construction manager and design-build contracts. In the wake of the recent Washington Supreme Court decision in W.G Clark Constr. Co. v. Pac. Nw. Reg'l Council of Carpenters, ___ P.3d ___ (Docket No. 88080-8) (2014), a decision by the United States District Court of Western Washington may give general contractors who do not already carry professional liability insurance another reason to think about procuring such insurance. Read more about the W.G. Clark Constr. Co. decision here.
Recently, Division II of the Washington Court of Appeals held that a Pierce County contract with a son's proprietorship was illegal, void, and unenforceable when the project was competitively bid by the father's proprietorship and awarded to the father by the County. Bankston v. Pierce County, 174 Wn.App. 932, 301 P.3d 495 (Division II, May 21, 2013).
Readers of our Blog will find of interest three construction related bills that had their first public hearings last week. A link to each bill is provided below.
The first two bills were heard in the House Labor and Workforce Development Committee, the third bill was heard in the Senate Committee on Law and Justice:
1. HB1025-Extending the Application of Prevailing Wage Requirements. http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bills/House%20Bills/1025.pdf.
HB1025 would extend the application for prevailing wage requirements by extending the definition of “public work” to include all publicly subsidized work, construction, alterations, repairs or improvements other than ordinary maintenance if subsidized by the public. The bill provides that:
(5) "Public work" has the same meaning as in RCW 39.04.010, except for purposes of this chapter, "public work" also includes all publicly subsidized work, construction, alterations, repairs, or improvements other than ordinary maintenance. Work is subsidized by the public if:
(a) One or more parties to the contract received or will receive a qualifying tax preference;
(b) One or more parties to the contract received or will receive a loan from the state or any county, municipality, or political subdivision;
(c) The work occurs on land that a party to the contract leases from the state or any county, municipality, or political subdivision; or
(d) The work occurs on land that a party to the contract purchased from the state or any county, municipality, or political subdivision for less than fair market value as determined by the state, county, municipality, or political subdivision at the time of the sale.
This broad definition of what constitutes “public work” would result in a significant expansion of prevailing wage requirements in our state to projects in which a public entity is not even a party to the contract. This would result in significant cost escalation on the projects captured by this expanded definition. I expect substantial opposition to this bill.
2. HB1026-Requiring Use of Resident Workers on Public Works. http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bills/House%20Bills/1026.pdf.
HB1026 would require specifications for every public works contract to contain a provision requiring that at least 75% of the labor hours be performed by Washington residents. The language of this bill states that residents of states bordering Washington may be considered Washington residents if the border state does not restrict the right of a Washington resident to be employed on public works project in that state. The full text of this bill can be found in the link above.
3. SB5031-Damages to Real Property Resulting from Construction, Alteration, or Repair on Adjacent Property. http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bills/Senate%20Bills/5031.pdf.
SB5031 would overrule the Washington Supreme Court decision in Vern J. Oja & Assoc. v. Washington Park Towers, Inc., 89 Wn.2d 72, 569 P.2d 1141 (1977), which held that claims for damages to real property resulting from construction activities on adjacent property do not accrue until the construction project is complete. In its place, a two year limitations period would be established so that a lawsuit for damage to real property resulting from construction on adjacent property must be commenced within two (2) years after the damaged property owner first discovered or reasonably should have discovered the damage.
Our understanding is that the proponent of this bill is Sound Transit, which is seeking to limit exposure for damage its projects cause to adjacent property to this two (2) year limitation period from the date the damage is discovered or should have been discovered.
We will supplement this post to advise how these bills progress through committee.
This is the last blog in a series of posts concerning the topic of implied duties in construction contracts. See previous articles: Implied Obligations in Construction Contracts; Implied Duty Not To Hinder Or Delay; Implied Duty of Good Faith and Fair Dealing.
The question of who owes the duty to ensure a safe workplace often arises in the construction industry. As often is the case, it depends on the facts of each project. Sometimes the duty to ensure a safe workplace belongs to the general contractor, sometimes the subcontractor, and sometimes the owner or developer. Sometimes it belongs to more than one party.
Under the common law, an employer who contracts with an independent contractor is not liable for injuries sustained by the independent contractor's employees. As with most general rules, there is an exception when the employer retains control over the independent contractor's work. Whether an employer has retained control over an independent contractor's work depends on the parties' contract and other conduct. Thus, all contractors have a common law duty to provide a safe workplace for all of their own employees, and sometimes for the employees of independent contractors (subcontractors) that they retain control over.
In addition to the common law duty, RCW 49.17.060 imposes a statutory duty on every employer: (1) to protect its own employees from recognized hazards not covered by specific safety regulations, and (2) to comply with WISHA regulations. The duty of an employer to protect its own employees is well established and mirrors the common law duty mentioned above. The duty to comply with WISHA regulations is less clear, and a number of Washington courts have considered who owes that duty.
- A. Contractor's Duties
In Washington, general contractors have a nondelegable duty to comply with WISHA regulations for every employee on the jobsite - both their own employees and the employees of independent subcontractors. In Stute v. P.B.M.C.,[i] the Washington Supreme Court held that RCW 49.17.060(2) creates the general contractor's duty to comply with WISHA regulations as to all employees at the jobsite - including all subcontractors. The Stute case involved a subcontractor's employee that fell three stories when installing a roof. The general contractor failed to provide scaffolding or other safety equipment for the roofing work. The general contractor (P.B.M.C.) argued that the subcontractor owed the duty to ensure compliance with WISHA safety regulations.
The court held that the general contractor, as the primary employer, has the primary responsibility for safety and a duty to comply with WISHA regulations because "[a] general contractor's supervisory authority places the general in the best position to ensure compliance with safety regulations."[ii] The court reasoned that the general contractor should bear the prime responsibility for compliance with WISHA regulations because the general contractor's "innate supervisory authority constitutes sufficient control over the workplace."[iii]
Mere months after Stute, the Court of Appeals in Weinert v. Bronco Nat. Co.,[iv] extended the duty to comply with WISHA regulations to both a second-tier subcontractor and an owner/developer. In Weinert, the second-tier subcontractor erected scaffolding for installation of siding. The court found that there was no evidence that the general contractor helped erect the scaffolding, and the general contractor had no knowledge of any defects in the erection of the scaffolding. The court reasoned that the second-tier subcontractor owed the same duty as the general contractor because Stute did not exclude imposing "a similar but more limited duty on a subcontractor"[v] and because the subcontractor had the "innate supervisory authority"[vi] over the siding installation.[vii] The second-tier subcontractor had the duty to comply with WISHA regulations under its control because it was in a better position to inspect and supervise work done on the scaffolding than the general contractor, whose responsibilities were broader. The court noted that the second-tier subcontractor's duty to comply with WISHA regulations extended only to employees under its control and supervision and that the general contractor's duty covered the rest of the project that was under its control and supervision.
In Husfloen v. MTA Const., Inc.,[viii] a general contractor hired a subcontractor to build a foundation for a residential construction project. The subcontractor hired a lower-tier subcontractor to pump concrete into forms. An employee of the lower-tier subcontractor was injured when the boom of his concrete pump truck contacted a power line. The pump truck was within 10 feet of the power line, which violated a WISHA regulation. The Court of Appeals held that the second-tier subcontractor owed a duty to comply with WISHA regulations because it was in a better position than the general contractor to ensure compliance with safety regulations because the general contractor did not supervise the site and did not supervise the subcontractor's work.
In Gilbert H. Moen Co. v. Island Steel Erectors, Inc.,[ix] the Supreme Court stated that both general contractors and subcontractors are responsible to ensure compliance with WISHA safety regulations within their areas of control. The court explained that under RCW 49.17.060, and the Stute court's reasoning, a "subcontractor, despite the general contractor's workplace safety duty, retains concurrent responsibility to meet workplace safety standards in the areas under its control."[x]
- B. Owner/Developer's Duties
After Stute, there have been a number of cases in which courts have considered whether an owner or developer also owes a duty to comply with WISHA regulations. In Weinert, the Supreme Court extended the duty to comply with WISHA regulations to an owner/developer because its position was so comparable to that of a general contractor that the policy behind enforcing the duty to comply with WISHA regulations regarding a general contractor was the same regarding an owner/developer because the owner/developer in Weinert had the same innate supervisory authority and was in the best position to enforce compliance with WISHA.
Similarly, in Doss v. ITT Rayonier, Inc.,[xi] the Court of Appeals held that an owner had a duty to comply with WISHA regulations after an employee was injured on the job because there was no significant distinction between the owner-independent contractor relationship and the general contractor-subcontractor relationship because the owner had "innate supervisory authority" that gave it control over the independent contractor.
In contrast, in Kamla v. Space Needle Corp.,[xii] the Supreme Court held that owners are not per se liable under RCW 49.17.060. In that case, the owner (Space Needle Corp.) did not owe a duty to an employee of a contractor when the employee was injured on the job because the owner did not have any knowledge regarding WISHA compliance for the work, and because the owner did not control any of the work.
In Afoa v. Port of Seattle,[xiii] a 2011 Court of Appeals case, the court reversed a summary judgment ruling that dismissed the Port of Seattle, as the owner of a project, because there were questions of fact regarding whether the Port retained control over the manner in which a contractor completed its work, whether the Port had the better opportunity and ability to insure compliance with safety standards than the general contractor, and whether the Port had "innate supervisory authority."
- C. Conclusion
Washington courts assume that general contractors have control over the worksite, and therefore have a nondelegable duty to comply with WISHA regulations. However, if someone alleges that any other party (i.e., owners, developers, subcontractors, or sub-tier subcontractors) has control of the worksite, then the courts will examine whether that party had an "innate supervisory authority" over a portion of the worksite to determine whether they also owed a duty to comply with WISHA regulations. This determination is fact specific to each case and project.
It is clear that the more supervisory authority that any party has over a worksite, the more likely they will be responsible for complying with WISHA regulations. In Cano-Garcia v. King County,[xiv] a 2012 case, the Court of Appeals stated that "liability flows to those who are in a position to control the actual implementation of safety standards in the workplace." Thus, whoever has control - general contractor, subcontractor, sub-tier contractor, owner/developer, etc. - has a duty to comply with WISHA regulations.
[i] 114 Wn.2d 454, 788 P.2d 545 (1990).
[ii] 114 Wn.2d at 463.
[iii] Id. at 464.
[iv] 58 Wash. App. 692, 795 P.2d 1167 (1990).
[v] 58 Wash. App. at 697.
[vi] Id. at 697.
[vii] The Weinert court used the same “innate supervisory authority” reasoning to hold that the owner/developer also owed the duty to comply with WISHA regulations, which is discussed later in this article. Weinert v. Bronco Nat. Co., 58 Wash. App. 692, 795 P.2d 1167 (1990).
[viii] 58 Wash. App. 686, 794 P.2d 859 (1990).
[ix] 128 Wn.2d 745, 912 P.2d 472 (1996).
[x] 128 Wn.2d at 757.
[xi] 60 Wash. App. 125, 803 P.2d 4 (1991).
[xii] 147 Wn.2d 114, 52 P.2d 472 (2002).
[xiii] 160 Wash. App. 234, 247 P.2d 482 (2011).
[xiv] 168 Wash. App. 223, 277 P.3d 34 (2012).
Recent years have seen a proliferation of lawsuits brought by lawyers who make their money from wage disputes for such things as the employer's failure to provide its employees with breaks. Statutorily, employees are entitled to certain breaks during their work day. The question was whether the state of California (the "nanny" state) may require that employers mandate and ensure that those breaks are taken. That issue came before the California Supreme Court in Brinker Restaurant Corp. v. Superior Court. Workers' attorneys argued that abuses are routine and wide spread when companies aren't required to issue direct orders to take breaks. The case was filed approximately nine years ago against a parent company of Chili's restaurant (Brinker International) and other restaurants, and alleged that the companies had deprived their workers of meal breaks in violation of California labor law. The court unanimously ruled on April 12, 2012, that although employers must free workers of job duties for the required 30-minute meal break, employers are "not obligated to police meal breaks and ensure no work thereafter is performed." A management side employment lawyer termed the decision one that will free employers from the "specter of frivolous lawsuits . . . [the] only clear losers today are the lawyers who make their money off of wage class-action lawsuits."